UAE market regulator now recognizes cryptocurrency as a security
The Securities and Commodities Authority [SCA] of the United Arab Emirates (UAE) introduced a new regulation to give cryptocurrency the status of securities. This is the latest step taken to exercise control over trading activities of virtual currencies.
Reasons to scrutinise cryptocurrencies
The volatile nature of cryptocurrencies along with the increasing count of initial coin offerings (ICOs) have brought the industry under the scanner of the government.
UAE's market regulator has framed a set of regulations for supervising digital assets and commodities. It has also provided a detailed picture about its plans and programs for the fintech domain. According to a statement, "In light of the rapid development of the digital tokens market and the response thereto by the regulators in a number of countries worldwide towards regulating the initial coin offerings (ICOs), the SCA Board of Directors has approved the SCA plan to regulate the ICOs and recognize them as securities.”
Previously, in June, the Abu Dhabi Global Market had launched norms to keep track of the activities pertaining to cryptocurrency. These activities primarily involve those performed by intermediaries, custodians and trading platforms operating within the organization's legislation.
Since last year, measures against the crypto industry have been taken by the UAE authorities. Earlier, the SCA had warned investors to be cautious about ICOs that involve cryptocurrency funding in an unregulated industry.
The Dubai Financial Services Authority, which is the city's financial regulator, had also issued a harsh warning late last year against ICOs and digital currencies.
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